European wheat futures declined on Tuesday, influenced by the rising strength of the euro and a downturn in Chicago wheat prices. Traders are anxiously awaiting the U.S. Department of Agriculture’s (USDA) upcoming crop report, which is expected to provide insights into potential effects from incoming tariffs. By mid-afternoon, May wheat futures fell by 0.2%, settling at 223.25 euros ($242.18) per metric ton, which is only slightly above last Friday’s six-month low of 219.25 euros. The euro’s surge to a four-month high against the U.S. dollar has made Western European grain more expensive for overseas buyers, further contributing to the decline in wheat prices.
In Chicago, wheat futures retraced some of their previous gains amid cautious trading leading up to the USDA’s monthly world crop report. The agency has indicated that it will take trade policies into account while making its forecasts. This uncertainty has caused anxiety in financial markets, with investors worried that U.S. tariffs could hinder economic growth and negatively affect grain exports due to possible retaliatory measures. The European wheat market is also turning its focus toward an upcoming import tender from Algeria scheduled for Wednesday, which is seen as an important indicator of export competition.
A German trader noted that while the Algerian demand is a positive development, falling Russian prices and the ongoing political tensions between Algeria and France may complicate French wheat sales. As of Tuesday, Russian wheat with 11.5% protein was trading at approximately $239-$241 per ton FOB for April shipments, about $5-$6 less than its French counterpart. Ukrainian wheat prices are in a similar range, making it competitive with both Russian and Romanian grains. Additionally, U.S. and Argentine wheat may compete for the Algerian tender, though firmer Chicago prices have recently pushed U.S. Gulf and Argentine FOB prices $2-$4 higher than Russian prices.